More and more companies share climate data

The number of companies sharing climate data with CDP, the world's leading data disclosure platform, has increased by nearly 40% over the past year as investors and policymakers put pressure on board members, data from Reuters shows.

Most of the world's wealth managers focus on climate change disclosure in their efforts to select the winners of the transition to a low carbon economy and assess the risks to their portfolios.

While some countries have begun to make such information mandatory, the standardized data of the nonprofit CDP platform has long provided investors with data that they can use to compare company performance.

Since the 2015 Paris Agreement, in which countries agreed to limit global warming, the number of companies submitting data to the CDP has more than doubled from 5,532 to 13,132. The CDP was founded in 2000.

"If you look at these numbers you can see that the rate of change is increasing, and I think that's really important. Every year is a much bigger jump than we expected last year," said Nicolette Bartlett, executive director of the CDP.

The pace of disclosures has also steadily increased, apart from a COVID-19-related slowdown last year. It increased by 38% over the 2020-2021 period.

Despite the increase in the number of companies reporting to the CDP, the quality of the information remains patchy and nearly 17,000 companies were given the worst possible "F" rating in the NGO's annual assessment for not reporting data.

Once the data is disclosed, companies will be encouraged to set emissions reduction targets based on scientific evidence on climate change and the goal of keeping global warming 1.5 degrees Celsius above the pre-industrial average to limit, be in line.

However, only 1,054 companies have had their goals approved by the Science-based Targets Initiative, a collaboration between CDP and other non-governmental organizations, and fewer than a thousand of CDP reporters state the emissions caused by the goods and services they buy and the Use of the products they sell.

"We understand that disclosure is the first step in the process for the companies that will be included in our system, and of course measuring means that in the end you can manage your business model and hopefully change it," said Bartlett.

The driving forces behind disclosure continue to be investors and corporations pushing their suppliers to act, with further impetus coming from the new emissions containment pledges at the UN climate talks in Scotland last month.

A breakdown by region shows that Latin America saw the biggest jump in releases since Paris, up 332% from 374 to 1,614. Asia rose 201% from 1,256 to 3,774 and Europe rose 140% from 1,745 to 4,187.

By country, China stood out with a 416% increase in data from 273 to 1,408 (Chart: Countries leading the way in corporate disclosure of climate change this year.

While the number of companies reporting on climate change has skyrocketed, a breakdown by sector shows that some of the largest emitters are lagging behind when it comes to sharing data.

Only 11 coal miners and 63 oil and gas producers have reported data globally, even though fossil fuels are the leading cause of man-made emissions. At the other end of the scale, companies in the electrical and electronics industry were at the top with 1,395 responses.